House supply gap begins to close

Report indicates improvement in shortfall as building consents pick up and thousands leave for Australia.

Based on the most recent months, Report author Mr Johnson believes new home-building could recover to about 6000 homes this year. Photo / Dean Purcell

Auckland's critical housing shortage worsened again last year - but the gap between population growth and house-building may be closing at last.

The Salvation Army's annual "state of the nation" report, published today, says the region's shortfall of new homes halved from 3662 in 2011 to 1881 in the year to last September, the smallest deficit since 2007.

But ironically, the improvement was the result of a slight pickup in the building industry combined with the smallest population increase for 11 years, as thousands of Aucklanders left for Australia.

Report author Alan Johnson said Auckland's population growth, which was the basis of the city's planning, had slowed as residents joined a net exodus of 38,000 New Zealanders who moved across the Tasman last year.

"It's difficult to know where people are leaving from, but obviously if there's a huge number going to Australia some of them are going to come from Auckland," he said.

On the other side of the ledger, consents for new houses and apartments in Auckland, which plunged from 2009 to 2011 to the lowest levels since at least the 1980s, recovered slightly to 4411 in the year to last September and 4582 in the year to December.

Based on the most recent months, Mr Johnson believes new home-building could recover to about 6000 homes this year, the highest since 2007.

But, he said, that would still fall short of the level of around 8000 homes a year needed to accommodate the region's long-term average population increase of about 24,000 a year, based on a 2006 census average of about three people to a house.

"The whole thing is still balanced very finely. Even if there is a recovery, it's going to be a gradual and fragile recovery," he said.

"We can't understand how the benefit takeup has declined at the same time as joblessness has risen. We think what is happening is that families are absorbing that burden by living together and supporting unemployed members of their households." The report says families that have kept their jobs are now recovering from the recession. Average weekly wages rose by 2 per cent more than prices last year.

"So we have this dichotomy between households that are in employment and are doing okay, but households where under-employment is a problem are being stretched," Mr Johnson said.

The Salvation Army saw food parcel numbers double in the first two years of the recession from 2007 to 2009, but numbers have levelled out since 2010 and rose by only 1.1 per cent last year.

"The reality is that, while we are seeing the same level of demand at community ministries that we saw two years ago, it hasn't grown."

He believes that overcrowding has spread during the recession from about 10 per cent to about a quarter of all Auckland neighbourhoods, but most people are "making do".

"People are simply living in things like portable bedrooms and caravans and fitted-out garages. It's not ideal, but it's not dreadful either," he said.

Salvation Army social workers were especially concerned about families paying $150-$200 a week to rent a single room in boarding houses.

"We had a focus group with people talking about poverty three or four months ago and there was a single woman there living in a boarding house who said it was terrible, there was fighting every day, so living conditions are not safe for single women and children," he said.